Administration Announces Delay of Healthcare Law’s Employer Mandate

On July 2nd, the Department of the Treasury announced that a significant part of the Patient Protection and Affordable Care Act (ACA), the Employer Mandate, will not be enforced until 2015. The provision required employers with 50 or more employees to provide health insurance for their employees, or possibly face a penalty. This is a one-year delay from the initial enforcement date of 2014. The change does not impact businesses with fewer than 50 employees. Such firms face no penalties at any point for not offering health coverage to employees.

The Administration cited several reasons for delaying the roll out of the Employer Mandate, including allowing more time for the government to develop reporting requirements and to provide more time for employers to adapt to new health insurance obligations and reporting systems. Similar concerns of readiness led to another small business delay earlier this year, when the Department of Health and Human Services (HHS) elected to wait until 2015 for employers to offer more than one health insurance plan to their employees when enrolling in the SHOP marketplace.

The rest of the health care law, including the opening of Individual and Small Business Health Insurance Marketplaces in every state, are still proceeding as scheduled (enrollment in the Marketplaces begins Oct. 1, 2013 with insurance plans becoming effective Jan. 1, 2014). Also moving forward is the Individual Mandate, which requires nearly every American to have health insurance beginning in 2014. Last week's decision by the Administration allows businesses another year to decide on coverage options for their businesses, without the fear of penalties.